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Wholesale Conditions Better, But U/W Still Tough

Mortgage News

A wholesale lending “renaissance” is on, according to one executive. And improving rates have forced at least one wholesale lender to increase minimum lock periods to 45 days. Meanwhile, wholesale lender underwriting overlays are a troubling trend for third-party originators.

Wholesale mortgage lenders are more frequently issuing their own underwriting overlays in addition guidelines established by Fannie Mae and Freddie Mac — a trend one industry insider said “makes things way, way more complicated and ultimately confusing for industry and consumers.”

In a recent table of conventional overlays, Bank of America Home Loans Correspondent Lending listed more than 80 overlays.

An Aug. 5 bulletin to brokers and wholesale correspondents from MetLife Home Loans indicated the immediate implementation of a temporary lock policy requiring a minimum 45-day lock. The requirement applies regardless of the type of transactions.

MetLife noted that historically low rates and the potential expense of lock extensions required that it implement the temporary policy.

The minimum lock term is only 30 days if the loan is preliminarily approved.

First Guaranty Mortgage Corp. signed up Expert Group Inc., a publicly traded mortgage broker, as a new wholesale client, a statement Friday said. The 22-year-old wholesale lender offers conventional, FHA, VA and USDA loan programs.

TMS Funding announced last week the addition of Robin Buttner and Stephen Jaser as wholesale account executives. Buttner, a 24-year mortgage veteran, will focus on national mortgage brokers. Jaser — whose prior wholesale lending employers include — American Mortgage Network, Wachovia and SCME Mortgage Bankers — will handle the Connecticut region.

In all, Milford, Conn.-based TMS said it operates in 17 states. Plans are afoot for an expansion to 35 states by the end of this year. TMS was launched in December 2009 by Total Mortgage Services.

Sierra Pacific Mortgage is using Motivity Solutions’ Movation instead of building a broker scorecard itself, a news release last month said.

Comergence Compliance Monitoring reported that five wholesale lenders — Gateway Funding Diversified Mortgage Services L.P., Real Estate Mortgage Network, RightStart Mortgage, MorganStrause and CUSO Mortgage — have recently signed on as clients of its due diligence services.

“The renaissance of the wholesale channel is in full swing, and lenders are eager to assuage investor concerns regarding TPO-originated loans,” Comergence President Greg Schroeder said in the statement.

Rates on commercial mortgage programs from Mortgage Bankers Co. start at 4.785 percent with no lender origination fee, a recent marketing piece indicated. The Coral Gables, Fla.-based firm said it requires no upfront due diligence. Loan amounts range from $250,000 to $7 million. Up to 90 percent is available on purchase financing utilizing the SBA 504 program. The minimum FICO score on all programs is 650, and loans don’t have balloon payments and can be amortized 20 or 25 years.

Hard-money lender OurFundsOnline.com announced in July a 5-basis-point increase in its loan-to-value ratio to 69 percent. The Santa Rosa, Calif.-based company, which claims to be California’s No. 1 equity based lender, said it finances residential and commercial properties in California.

Manufactured housing loan programs are being marketed by AMX Loans. The a 22-year-old wholesaler, a division of Land Home Financial, touts purchase and rate-term refinance LTVs up to 96.5 percent for borrowers with scores of at least 660 using FHA programs, while FHA cashouts are available up to 75 percent. Financing is available for second homes and vacation homes.

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